Fourth Quarter Normalized FFO of $0.35 Per
Basic Share
And AFFO of $0.30 Per Basic Share
Fourth Quarter Dividend of $0.26 Per
Share
New Senior Investment Group Inc. (“New Senior” or the “Company”)
(NYSE:SNR) announced today its results for the quarter and full
year ended December 31, 2015.
2015 AND RECENT BUSINESS
HIGHLIGHTS
- 2015 total managed portfolio average
occupancy increased 310 basis points to 86.6% vs. 2014
- 2015 same store net operating income
(“NOI”) growth for the managed portfolio of 4.5% vs. 2014
- 2015 same store average occupancy for
the managed portfolio increased 150 basis points vs. 2014
- Occupancy of the triple net portfolio
increased 110 basis points for 4Q’15 vs. 4Q’14
- Completed $1.3 billion of acquisitions
in 2015, adding 54 majority private pay properties
- Raised $1.2 billion of debt in 2015 and
lowered the effective interest rate of total debt by 80bps to
4.0%
- Repurchased $40 million of common stock
at a weighted average price of $9.05 per share
4Q 2015 FINANCIAL
HIGHLIGHTS
- Total NOI of $57.7 million compared to
$38.7 million for 4Q 2014, a 49% increase
- Normalized Funds from Operations
(“Normalized FFO”) of $29.8 million, or $0.35 per basic and $0.34
per diluted share
- AFFO of $25.7 million, or $0.30 per
basic and diluted share
- Normalized Funds Available for
Distribution (“Normalized FAD”) of $23.3 million, or $0.27 per
basic and diluted share
- Net loss of ($22.0) million, or ($0.26)
per basic and diluted share
“In our first full year as a public company, we are pleased to
have delivered strong same store NOI growth of 4.5% for 2015,
generated a 58% increase in our AFFO per share for 4Q’15 versus
4Q’14 and provided our shareholders with a 13% increase in our
quarterly dividend,” New Senior Chief Executive Officer Susan
Givens said. “Furthermore, we significantly increased our exposure
to private pay independent living properties, which now account for
71% of our NOI, and lowered the effective interest rate of our debt
by 80 basis points while lengthening our overall weighted average
debt maturity. For 2016, we remain intently focused on driving
organic growth in our private pay senior housing portfolio and
pursuing selective asset sales.”
FOURTH QUARTER AND FULL YEAR 2015
RESULTS
Dollars in thousands, except per share data
For the Quarter Ended December 31, 2015 For
the Year Ended December 31, 2015 Amount
Per Basic
Share(B)
Per Diluted
Share(B)
Amount
Per Basic
Share(B)
Per Diluted
Share(B)
Non-GAAP(A)(C)
NOI $57,745 -- -- $198,935 -- -- FFO 27,752 $0.32 $0.32 77,893
$1.02 $1.01 Normalized FFO 29,766 $0.35 $0.34 98,057 $1.28 $1.27
AFFO 25,707 $0.30 $0.30 83,986 $1.10 $1.09 Normalized FAD 23,313
$0.27 $0.27 76,605 $1.00 $0.99
GAAP
Net loss ($22,023) ($0.26) ($0.26) ($82,425) ($1.08) ($1.08) (A)
See end of press release for reconciliation of non-GAAP measures to
net loss.
(B) Per share amounts for the quarter
ended December 31, 2015 are based on 86.3 million basic shares
outstanding and 86.6 million diluted shares outstanding for
non-GAAP amounts and 86.3 million diluted shares outstanding for
net loss. Per share amounts for the year ended December 31, 2015
are based on 76.6 million basic shares outstanding and 77.2 million
diluted shares outstanding for non-GAAP amounts and 76.6 million
diluted shares outstanding for net loss. See the appendix in the
fourth quarter presentation posted in the Investor Relations
section of the Company's website for an explanation of the
difference between basic and diluted shares.
(C) Results of operations for 2015 include $2.2 million in out of
period adjustments which primarily relate to: (a) a $2.2 million
tax benefit recognized in the fourth quarter for deferred tax
assets originating in our TRS which should have been recognized in
prior years and (b) an adjustment of approximately $1.8 million in
additional amortization of acquired intangibles recognized in the
fourth quarter, the majority of which should have been recognized
in the three-month period ended September 30, 2015. We do not
believe these out of period adjustments are material to our
financial position or results of operations for any prior periods,
nor to the year ended December 31, 2015.
2015 ACQUISITION
ACTIVITY
In 2015, the Company closed on $1.3 billion of acquisitions,
which included 49 independent living (“IL”) properties, four
assisted living / memory care (“AL/MC”) properties and one rental
continuing care retirement community (“CCRC”). These acquisitions
increased the Company’s private pay independent living exposure
from 61% of NOI for 4Q 2014 to 71% for 4Q 2015.
PORTFOLIO PERFORMANCE
Total NOI increased 49% to $57.7 million compared to $38.7
million for 4Q 2014.
For the managed portfolio, 2015 total average occupancy
increased 310 basis points to 86.6% compared to 83.5% for 2014, and
same store average occupancy increased 150 basis points to 84.2%
compared to 82.7% for 2014. Same store NOI for 2015 increased 4.5%
to $40.1 million compared to $38.4 million for 2014. As previously
disclosed, same store information excludes one property that was
not fully operational during 2015 and a $122,000 write-off of a
receivable acquired in connection with an acquisition in 2013.
Including these adjustments, same store occupancy growth for 2015
was 90 basis points and same store NOI growth was 2.0% compared to
2014.
For the triple net portfolio, total portfolio average occupancy
increased 110 basis points to 88.9% compared to 87.8% for 4Q 2014.
Triple net average occupancy is presented one quarter in arrears
from the date reported on a trailing twelve month basis.
SHARE REPURCHASE PROGRAM
On December 1, 2015, New Senior’s Board of Directors authorized
the repurchase of up to $100.0 million of the Company’s common
stock over the next 12 months. During December, the Company
repurchased 1,112,000 shares at an average price of $9.22 per
share, for a total cost of $10.3 million (including transaction
costs).
On December 17, 2015, the Company commenced a modified “Dutch
auction” self-tender offer (“Tender Offer”) to repurchase up to
$30.0 million of shares of our common stock. The Tender Offer
expired on January 19, 2016. The Company invested $30.8 million,
including transaction costs, to repurchase 3,333,333 shares at a
price of $9.00 per share.
FOURTH QUARTER DIVIDEND
On February 23, 2016, the Company’s Board of Directors declared
a cash dividend of $0.26 per share for the quarter ended December
31, 2015. The dividend is payable on March 22, 2016 to shareholders
of record on March 8, 2016.
ADDITIONAL INFORMATION
For additional information that management believes to be useful
for investors, please refer to the presentation posted in the
Investor Relations section of the Company’s website,
www.newseniorinv.com.
EARNINGS CONFERENCE CALL
Management will host a conference call on February 25, 2016 at
9:00 A.M. Eastern Time. The conference call may be accessed by
dialing (855) 734-8393 (from within the U.S.) or (970) 315-0985
(from outside of the U.S.) ten minutes prior to the scheduled start
of the call; please reference “New Senior Fourth Quarter and Full
Year 2015 Earnings Call.” A simultaneous webcast of the conference
call will be available to the public on a listen-only basis at
www.newseniorinv.com. Please allow extra time prior to the call to
visit the website and download any necessary software required to
listen to the internet broadcast.
A telephonic replay of the conference call will also be
available approximately two hours following the call’s completion
through 11:59 P.M. Eastern Time on March 25, 2016 by dialing (855)
859-2056 (from within the U.S.) or (404) 537-3406 (from outside the
U.S.); please reference access code “48845559.”
ABOUT NEW SENIOR
New Senior is a real estate investment trust focused on
investing in senior housing properties across the United States.
The Company is the only pure play senior housing REIT and is one of
the largest owners of senior housing properties. Currently, New
Senior owns 154 properties located across 37 states. New Senior is
managed by an affiliate of Fortress Investment Group LLC, a global
investment management firm. More information about New Senior can
be found at www.newseniorinv.com.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Certain items in this press release constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, such as statements regarding management’s
intention to selectively sell assets and use the proceeds to
repurchase common stock or drive growth in our private pay senior
housing portfolio. These statements are not historical facts. They
represent management’s current expectations regarding future events
and are subject to a number of trends and uncertainties, many of
which are beyond our control, that could cause actual results to
differ materially from those described in the forward-looking
statements. Accordingly, you should not place undue reliance on any
forward-looking statements contained herein. For a discussion of
some of the risks and important factors that could affect such
forward-looking statements, see the sections entitled “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in the Company’s annual and
quarterly reports filed with the Securities and Exchange
Commission, which are available on the Company’s website
(www.newseniorinv.com). New risks and uncertainties emerge from
time to time, and it is not possible for New Senior to predict or
assess the impact of every factor that may cause its actual results
to differ from those contained in any forward-looking statements.
Forward-looking statements contained herein speak only as of the
date of this press release, and New Senior expressly disclaims any
obligation to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in New Senior's expectations with regard thereto or change in
events, conditions or circumstances on which any statement is
based.
Consolidated Balance Sheets (dollars in thousands,
except share data) December 31,
Assets 2015 2014 Real estate investments:
Land
$ 222,795 $ 138,799 Buildings, improvements and other 2,568,133
1,500,130 Accumulated depreciation (129,788 ) (56,988
) Net real estate property 2,661,140 1,581,941
Acquired lease and other intangible assets 308,917 178,615
Accumulated amortization (166,714 ) (79,021 ) Net
real estate intangibles 142,203 99,594
Net real estate investments 2,803,343 1,681,535 Cash and
cash equivalents 116,881 226,377 Straight-line rent receivables
51,916 26,454 Receivables and other assets, net 45,319
31,793
Total Assets $
3,017,459 $ 1,966,159
Liabilities and Equity Liabilities Mortgage notes
payable, net $ 2,151,317 $ 1,223,224 Due to affiliates 9,644 6,882
Dividends payable - 15,276 Accrued expenses and other liabilities
89,173 72,241
Total Liabilities
$ 2,250,134 $ 1,317,623 Commitments and
contingencies
Equity
Preferred Stock $0.01 par value,
100,000,000 sharesauthorized and none outstanding as of both
December 31, 2015 and 2014
$ - $ -
Common stock $0.01 par value,
2,000,000,000 sharesauthorized, 85,447,551 and 66,415,415 shares
issued andoutstanding as of December 31, 2015 and 2014,
respectively
854 664 Additional paid-in capital 928,654 672,587 Accumulated
deficit (162,183 ) (24,715 )
Total Equity $
767,325 $ 648,536
Total Liabilities
and Equity $ 3,017,459 $
1,966,159
Consolidated Statements of Operations(C) (dollars
in thousands, except share data) (unaudited)
Quarter Ended December 31, Year Ended December 31,
2015 2014 2015 2014 Revenues
Resident fees and services $ 89,940 $ 43,706 $ 277,324 $ 156,993
Rental revenue 28,493 26,676
111,154 97,992 Total revenues 118,433
70,382 388,478 254,985
Expenses Property operating expense
60,688
31,711
189,543 112,242 Depreciation and amortization
49,775
28,597
160,318 103,279 Interest expense
22,675
15,494
75,021 57,026 Acquisition, transaction, and integration expense
1,954
1,972
13,444 14,295 Management fee to affiliate
4,072
2,706
14,279 8,470 General and administrative expense
4,543
4,363
15,233 7,416 Loss on extinguishment of debt - - 5,091 - Other
expense (income)
60
- 1,629 (1,500 ) Total expenses
$
143,767
$
84,843
$ 474,558 $ 301,228
Loss Before Income
Taxes (25,334 ) (14,461 ) (86,080 ) (46,243 ) Income tax
(benefit) expense
(3,311
)
(1,177
)
(3,655 ) 160
Net Loss $ (22,023 ) $
(13,284 ) $ (82,425 ) $ (46,403 )
Loss Per Share
of Common Stock Basic and diluted(A) $ (0.26 ) $ (0.20 ) $
(1.08 ) $ (0.70 )
Weighted Average Number of Shares of
CommonStock Outstanding
Basic and diluted(B) 86,271,022 66,404,051
76,601,161 66,400,914
Dividends Declared Per Share of Common Stock $ 0.26 $
0.23 $ 0.75 $ 0.23
(A) Basic earnings per share (“EPS”) is calculated by dividing
net income by the weighted average number of shares of common stock
outstanding. Diluted EPS is computed by dividing net income by the
weighted average number of shares of common stock outstanding plus
the additional dilutive effect, if any, of common stock equivalents
during each period.
(B) For the purposes of computing income per share of common
stock for periods prior to the spin-off on November 6, 2014, the
Company treated the common shares issued in connection with the
spin-off as if they had been outstanding for all periods presented,
similar to a stock split. All outstanding options were excluded
from the diluted share calculation as their effect would have been
anti-dilutive.
(C) Results of operations for 2015 include $2.2 million in out
of period adjustments which primarily relate to: (a) a $2.2 million
tax benefit recognized in the fourth quarter for deferred tax
assets originating in our TRS which should have been recognized in
prior years and (b) an adjustment of approximately $1.8 million in
additional amortization of acquired intangibles recognized in the
fourth quarter, the majority of which should have been recognized
in the three-month period ended September 30, 2015. The Company
does not believe these out of period adjustments are material to
its financial position or results of operations for any prior
periods, nor to the year ended December 31, 2015.
Consolidated Statements of Cash
Flows (dollars in thousands) (unaudited)
Quarter Ended December 31, Year Ended December 31,
2015 2014 2015 2014 Cash Flows From
Operating Activities Net loss $ (22,023 ) $ (13,284 ) $ (82,425
) $ (46,403 ) Adjustments to reconcile net loss to net cash
provided by operating activities: Depreciation of tangible assets
and amortization of intangible assets 49,809 28,716 160,460 103,398
Amortization of deferred financing costs 2,543 2,188 9,320 8,331
Amortization of deferred community fees 745 (436 ) (1,141 ) (1,420
) Amortization of premium on mortgage notes payable (151 ) 215 77
850 Non-cash straight-line rent (6,577 ) (6,898 ) (25,462 ) (25,932
) Change in fair value of contingent consideration - - - (1,500 )
Loss on extinguishment of debt - - 5,091 - Equity-based
compensation - - 17 - Provision for bad debt 656 - 2,105 922
Unrealized loss on interest rate caps 127 - 964 - Changes in:
Receivables and other assets, net (1,720 ) 2,865 (14,868 ) (6,053 )
Due to affiliates (1,785 ) (5,345 ) 2,762 989 Accrued expenses and
other liabilities (6,038 ) (7,420 ) 12,602
13,429 Net cash provided by operating
activities $ 15,586 $ 601 $ 69,502 $ 46,611
Cash Flows From Investing Activities Cash paid
for acquisitions, net of deposits $ (39,174 ) $ (15,691 ) $
(1,251,343 ) $ (314,935 ) Capital expenditures (3,623 ) (2,712 )
(11,411 ) (8,538 ) Funds reserved for future capital expenditures
(1,166 ) (2,512 ) (3,169 ) (3,530 ) Deposits paid for real estate
investments - (4,700 ) (11,355 )
(4,855 ) Net cash used in investing activities $ (43,963 ) $
(25,615 ) $ (1,277,278 ) $ (331,858 )
Cash Flows From
Financing Activities Proceeds from mortgage notes payable $
26,000 $ 115,000 $ 1,248,252 $ 195,144 Principal payments of
mortgage notes payable (3,916 ) (3,794 ) (15,599 ) (13,736 )
Repayments of mortgage notes payable - - (304,484 ) - Payment of
exit fee on extinguishment of debt - - (1,499 ) - Payment of
deferred financing costs (771 ) (1,590 ) (13,065 ) (2,557 ) Payment
of common stock dividend (22,498 ) - (70,318 ) - Purchase of
interest rate caps (210 ) - (1,247 ) - Proceeds from issuance of
common stock and exercise of options - 142 276,569 142 Costs
related to issuance of common stock - - (10,056 ) - Repurchase of
common stock (10,273 ) - (10,273 ) - Contributions from Newcastle -
213,743 - 461,218 Distributions to Newcastle -
(114,659 ) - (158,980 ) Net cash (used in)
provided by financing activities $ (11,668 ) $ 208,842 $
1,098,280 $ 481,231
Net (Decrease) Increase in
Cash and Cash Equivalents (40,045 ) 183,828 (109,496 ) 195,984
Cash and Cash Equivalents, Beginning of Year 156,926
42,549 226,377 30,393
Cash and Cash Equivalents, End of Year $ 116,881
$ 226,377 $ 116,881 $ 226,377
Supplemental Disclosure of Cash Flow Information Cash paid
during the year for interest expense $ 19,984 $ 12,906 $ 62,870 $
45,026 Cash paid during the year for income taxes - 187 190 1,357
Supplemental Schedule of Non-Cash Investing and Financing
Activities Common stock dividend declared but not paid $ - $
15,276 $ - $ 15,276 Recognized contingent consideration at fair
value - - - 50 Issuance of common stock and exercise of options 254
23 316 23 Other liabilities assumed with acquisitions - - 651 -
Assumption of mortgage notes payable at fair value - - - - Issuance
of seller financing for acquisition at fair value - - - -
Reconciliation of NOI to Net Loss (dollars in
thousands) For the Quarter Ended December 31,
2015 Total revenues $ 118,433 Property operating expense
(60,688 )
NOI 57,745 Depreciation and
amortization (49,775 ) Interest expense (22,675 ) Acquisition,
transaction and integration expense (1,954 ) Management fee to
affiliate (4,072 ) General and administrative expense (4,543 )
Other expense (60 ) Income tax benefit 3,311
Net
Loss $ (22,023 ) Reconciliation
of Net Loss to FFO, Normalized FFO, AFFO and Normalized FAD
(dollars and shares in thousands, except per share data)
For the Quarter Ended December 31, 2015 Net
loss $ (22,023 ) Adjustments: Depreciation and amortization
49,775
FFO $ 27,752 FFO per
diluted share $ 0.32 Acquisition,
transaction and integration expense 1,954 Other expense
60
Normalized FFO $ 29,766
Normalized FFO per diluted share $ 0.34
Straight-line rent (6,577 ) Amortization of deferred
financing costs 2,543 Amortization of deferred community fees and
other(1) (25 )
AFFO $ 25,707
AFFO per diluted share $ 0.30
Maintenance capital expenditures (2,394 )
Normalized FAD $ 23,313 Normalized FAD per
diluted share $ 0.27
Weighted average basic shares outstanding 86,271 Weighted average
diluted shares outstanding(2) 86,625
(1) Includes net change in deferred community fees, premium on
mortgage notes payable, above/below market lease amortization and
other non-cash GAAP adjustments.
(2) Includes dilutive effect of options.
Reconciliation of Same-Store NOI (unaudited)
(dollars in thousands)
2014 2015
NNN Properties
Same Store Managed
Properties(1)
Non-Same Store
Managed Properties
Total
NNN Properties
Same Store Managed
Properties(1)
Non-Same Store
Managed Properties
Total NOI $97,992 $40,088 $4,663
$142,743 $111,154 $40,875 $46,906
$198,935 Depreciation and amortization (103,279 )
(160,318 ) Interest expense (57,026 ) (75,021 ) Acquisition,
transaction and integration expense (14,295 ) (13,444 ) Management
fee to affiliate (8,470 ) (14,279 ) General and administrative
expense (7,416 ) (15,233 ) Loss on extinguishment of debt - (5,091
) Other income (expense) 1,500 (1,629 ) Income tax benefit
(expense) (160 ) 3,655
Net Loss ($46,403
) ($82,425 )
(1) Includes all properties owned during both comparison periods
presented.
The tables above set forth reconciliations of non-GAAP measures
to net (loss), which is the most directly comparable GAAP financial
measure. A non-GAAP financial measure is a measure of historical or
future financial performance, financial position or cash flows that
excludes or includes amounts that are not excluded from or included
in the most comparable GAAP measure.
We believe that net income (loss), as defined by GAAP, is the
most appropriate earnings measurement. However, we consider certain
non-GAAP financial measures to be useful supplemental measures of
our operating performance.
We believe that Normalized FFO is useful because it allows
investors, analysts and our management to compare our operating
performance to the operating performance of other real estate
companies and between periods on a consistent basis without having
to account for differences caused by period specific items and
events such as transaction costs. In addition, we believe AFFO and
normalized FAD are useful as supplemental measures of our ability
to fund dividend payments.
The non-GAAP financial measures we present may not be identical
to those presented by other real estate companies due to the fact
that not all real estate companies use the same definitions. You
should not consider these measures as alternatives to net income
(determined in accordance with GAAP) as indicators of our financial
performance or as alternatives to cash flow from operating
activities (determined in accordance with GAAP) as measures of our
liquidity, nor are these measures necessarily indicative of
sufficient cash flow to fund all of our needs. In order to
facilitate a clear understanding of our consolidated historical
operating results, you should examine these measures in conjunction
with net income as presented in our Consolidated Financial
Statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20160225005577/en/
New Senior Investment Group Inc.David Smith, 212-479-3140
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